Securities Industry Essentials (SIE)
Practice Exam 100 Questions And
Correct Answers (Verified Answers) Plus
Rationales 2026 Q&A | Instant
Download Pdf
All major topics: Capital Markets, Products and Risks, Trading and Customer
Accounts, Regulatory Framework
1. Which of the following is a characteristic of common stock?
A. It pays a fixed dividend.
B. It represents ownership in a corporation.
C. It is a debt security.
D. It has a stated maturity date.
Rationale: Common stock signifies ownership in a company and gives
shareholders voting rights. It has no maturity date or fixed dividend._
,2. Which of the following would be considered a money market
instrument?
A. Treasury bond
B. Treasury bill
C. Corporate bond
D. Preferred stock
Rationale: Treasury bills are short-term debt securities (less than one year)
and are traded in the money market._
3. What is the main purpose of the Securities Act of 1933?
A. Regulate secondary market trading
B. Create the SEC
C. Require full and fair disclosure for new issues
D. Establish FINRA
Rationale: The 1933 Act ensures investors receive material information
about new issues before purchasing._
4. Which organization regulates broker-dealers and their registered
representatives?
A. SEC
B. FINRA
C. SIPC
D. MSRB
,Rationale: FINRA oversees broker-dealers and enforces industry rules and
conduct for registered reps._
5. What is the par value of most corporate bonds?
A. $500
B. $1,000
C. $5,000
D. $10,000
Rationale: Corporate bonds are typically issued with a $1,000 face (par)
value._
6. A bond rated “BB” by S&P is considered:
A. Investment grade
B. Non-investment grade (speculative)
C. Defaulted
D. Tax-free
Rationale: Ratings below BBB (S&P) or Baa (Moody’s) are speculative, or
“junk,” bonds._
7. Which of the following securities is exempt from registration under the
Securities Act of 1933?
A. Corporate bonds
, B. U.S. Treasury securities
C. Mutual funds
D. ADRs
Rationale: U.S. government securities are exempt from SEC registration._
8. The spread in a municipal bond quote represents:
A. The difference between coupon and yield
B. The difference between bid and ask prices
C. The difference between par and market price
D. The difference between tax rates
Rationale: The spread is the dealer’s profit margin between the bid (buy)
and ask (sell) price._
9. Which of the following is a nonqualified retirement plan?
A. 401(k)
B. 403(b)
C. Deferred compensation plan
D. IRA
Rationale: Deferred compensation plans are nonqualified and not ERISA-
protected._
Practice Exam 100 Questions And
Correct Answers (Verified Answers) Plus
Rationales 2026 Q&A | Instant
Download Pdf
All major topics: Capital Markets, Products and Risks, Trading and Customer
Accounts, Regulatory Framework
1. Which of the following is a characteristic of common stock?
A. It pays a fixed dividend.
B. It represents ownership in a corporation.
C. It is a debt security.
D. It has a stated maturity date.
Rationale: Common stock signifies ownership in a company and gives
shareholders voting rights. It has no maturity date or fixed dividend._
,2. Which of the following would be considered a money market
instrument?
A. Treasury bond
B. Treasury bill
C. Corporate bond
D. Preferred stock
Rationale: Treasury bills are short-term debt securities (less than one year)
and are traded in the money market._
3. What is the main purpose of the Securities Act of 1933?
A. Regulate secondary market trading
B. Create the SEC
C. Require full and fair disclosure for new issues
D. Establish FINRA
Rationale: The 1933 Act ensures investors receive material information
about new issues before purchasing._
4. Which organization regulates broker-dealers and their registered
representatives?
A. SEC
B. FINRA
C. SIPC
D. MSRB
,Rationale: FINRA oversees broker-dealers and enforces industry rules and
conduct for registered reps._
5. What is the par value of most corporate bonds?
A. $500
B. $1,000
C. $5,000
D. $10,000
Rationale: Corporate bonds are typically issued with a $1,000 face (par)
value._
6. A bond rated “BB” by S&P is considered:
A. Investment grade
B. Non-investment grade (speculative)
C. Defaulted
D. Tax-free
Rationale: Ratings below BBB (S&P) or Baa (Moody’s) are speculative, or
“junk,” bonds._
7. Which of the following securities is exempt from registration under the
Securities Act of 1933?
A. Corporate bonds
, B. U.S. Treasury securities
C. Mutual funds
D. ADRs
Rationale: U.S. government securities are exempt from SEC registration._
8. The spread in a municipal bond quote represents:
A. The difference between coupon and yield
B. The difference between bid and ask prices
C. The difference between par and market price
D. The difference between tax rates
Rationale: The spread is the dealer’s profit margin between the bid (buy)
and ask (sell) price._
9. Which of the following is a nonqualified retirement plan?
A. 401(k)
B. 403(b)
C. Deferred compensation plan
D. IRA
Rationale: Deferred compensation plans are nonqualified and not ERISA-
protected._
